Business Is Booming in North Carolina

Currently, North Carolina’s State Medical Facilities Plan does not identify a need for many new additional nursing home or adult care home beds. The 2014 SMFP identifies no need for nursing home beds, and for only 30 assisted living beds each in Jones and Pamlico Counties. At the State Health Coordinating Council’s recent meeting, where it’s drafting the 2015 SMFP, the SHCC identified no need for nursing home beds and a need for 20 adult care home beds in Jones County, 10 adult care home beds in Washington County, and 330 adult care home beds in Brunswick County. Otherwise, there are no new long term care beds identified in North Carolina in the next 18 months.

Many nursing home and assisted living providers may believe that developing new beds under the SHCC need-determination methodology provides the only opportunity for growth. However, there are several other options. The CON law permits the acquisition of an existing licensed health service facility without filing a new CON application. Even if a facility is closed, it can still be acquired, as long as the beds are still licensed.

In order to obtain the exemption, the purchaser must send a letter to the CON section advising of its intent to enter into a purchase agreement with the existing facility owner. While these letters typically do not require a CON application, they do require the assistance of counsel to ensure compliance with the law. Negotiation and preparation of the asset transfer documents also typically require consultation with an attorney.

Further, if the purchaser wishes to relocate the beds to a new site, that can be achieved through filing a CON application to relocate the beds. Nursing home and adult care home beds may be relocated within the same county through the CON process regardless of the SMFP need-determination. In addition, a provider may file a CON application to relocate beds to a contiguous county, as long as the proposal would not result in a deficit of licensed beds in the county that would be losing the beds or a surplus of beds in the county gaining the beds, as reflected in the SMFP.

In addition, many hospitals have been getting out of the nursing home business in recent years, transferring their beds to existing nursing home providers in their counties. Regulatory approval for this type of transfer can be obtained through a combination of an exemption determination and a CON application. However, this process is complicated, and advice of counsel is particularly recommended if you are exploring this option.

North Carolina is now the 10th largest state in the U.S. and one of the fastest-growing states in the over-65 population category. Despite the absence of “new” beds in the annual SMFP, the state’s nursing facility and assisted living industries are expanding, merging, moving and reconfiguring using all these devices. In short, business is booming.

Please feel free to contact our health law team if you are considering expansion, merger, relocation, or selling a long term care company or facility. We have a great deal of experience in this area and are happy to help.